Demographic factors that affect car insurance rates

Demographic factors that affect car insurance rates

September 21, 2016
car insurance rates
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We now live in a world of financial instability, where saving as much as possible is crucial. Americans spend important amounts of money each year on auto insurance, that’s why it’s so important to make sure that you get the lowest car insurance rates possibles.

Numerous factors affect your overall rate. They can be grouped in three categories:

In this article we will talk about the first category. Here’s what you need to know:

Demographic factors that affect car insurance rates

When talking about demographic factors that influence your car insurance rate, many people think about their credit scores or their gender, but car insurance companies also take many other things into account:

1. Credit score

Do you sometimes feel like your credit score is running your entire life? Although this might be an exaggeration, you’ can’t deny the importance of a good credit score. Insurers always take it into account when calculating your premiums and, the higher the score, the lower the premiums.

Unfortunately, if you have a low score, you can expect to get high premiums from your insurer. But you can turn this around by improving your score. There are a lot of ways to do it. You should definitely try them all out before shopping for new insurance. Improving your score will not only give you a healthier financial life, but it will also help you save a lot of money each year.

2. Gender and age

It’s all about statistics here. Young men will get higher rates than young women because, statistically, teenage female drivers are safer than teenage male drivers. However, this changes when you reach retirement. Older men get better rates than older women, because older women tend to get involved in more minor accidents than older men.

3. Your location

Insurers offer different rates for different states. Additionally, because most accidents happen close to home, the area where you live is also an important factor in calculating your rates. If you live in a densely populated neighborhood, with a higher number of vehicles, the chances of you being involved in an accident are higher. As a result, your rates will also be higher.

Besides this, the rates of theft, the number of uninsured drivers in your area and the cost of parts at your local car repair shops will also be considered.

4. Your marital status

Are you married? If you are, you could get a discount from your insurer. According to their statistics, married people tend to have fewer accidents than single people. But don’t only rely on this when looking for lower rates. Your driving history is much more important.

5. Your profession

It might not look like it, but insurers also factor in your profession when calculating your rates. People whose jobs require them to spend a lot of time behind the wheel will have higher rates. But there’s one good thing about this. Police officers, paramedics or nuns often receive a good rate, as they are seen to be more careful than the average driver.

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